Although the Australian share market has recovered strongly in recent weeks and is close to moving into positive territory for the year, not all shares have performed as positively.
Two ASX shares which are still trading materially lower than their 52-week highs are listed below. Are these beaten down shares in the buy zone?
Bravura Solutions Ltd (ASX: BVS)
Bravura Solutions is a provider of software products and services to the wealth management and funds administration industries. Its shares have fallen heavily this year and are down a disappointing 46% from their 52-week high. This has been driven largely by management’s underwhelming guidance for FY 2021. It has warned that the pandemic could lead to flat profits this year.
One broker that thinks investors should be taking advantage of the weakness in the Bravura share price is Goldman Sachs. It recently reiterated its buy rating and put a $4.50 price target on its shares.
The broker believes Bravura is well positioned due to its strong market position in existing product offerings (which have a high degree of recurring revenue), its emerging microservices ecosystem strategy, and strong net cash position. It believes the latter provides the company with the flexibility to invest in the new microservices ecosystem and pursue further acquisitions.
Telstra Corporation Ltd (ASX: TLS)
This telco giant has been in the news this week after announcing plans to split its business into three separate entities. This will comprises InfraCo Fixed, InfraCo Towers, and ServeCo. Management believes the restructure would enable the company to take advantage of potential monetisation opportunities for its infrastructure assets, which could create additional value for shareholders.
This plan has gone down well with investors and also with brokers. For example, Goldman Sachs has reiterated its buy rating and $3.60 price target on the company’s shares. It has also reaffirmed its forecast for a 16 cents per share fully franked dividend in FY 2021 and beyond. Which, based on the current Telstra share price, would provide investors with a 5.2% dividend yield.
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More reading
- 2 cheap ASX shares to buy right now
- ASX 200 Weekly Wrap: ASX continues to climb, despite outage
- 2 ASX dividend shares with huge yields
- Why the Telstra (ASX:TLS) share price can go even higher from here
- 2 ASX dividend shares to buy today for income
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd and Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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